Nespresso maker Nestle on Tuesday said it has sealed a deal to market the products of US coffee giant Starbucks around the world, outside of its cafes.
Switzerland transnational food giant Nestle, which additionally produces Nescafe instant coffee, had reported in May it would pay $7.15 billion (6.13 billion euros) marrying its international distribution network with the allure of one of the biggest names in coffee.
The Swiss company said in a statement, according to the deal some 500 Starbucks employees in the United States and Europe will join Nestle.
The affiliation covers a number of Starbucks’ current packaged products: including meal and ground coffee, entire beans as well as instant and portioned coffee. Brands included in the deal include Starbucks, Seattle’s Best Coffee, TeavanaTM/MC, Starbucks VIA Instant, Torrefazione Italia coffee and Starbucks-branded K-Cup pods (RTD products and sales of any products within Starbucks coffee shops, however, are excluded).
Nestle CEO Mark Schneider said:
“With Starbucks, Nescafe and Nespresso we bring together the world’s most iconic coffee brands,”
As per the statement, the deal will significantly boost Nestle’s portfolio in North America.
Mark Schneide further added,
“The outstanding collaboration between the two teams resulted in a swift completion of this agreement, which will pave the way to capture further growth opportunities”
Under Schneider’s authority, Nestle has made coffee a key need in its development strategy, especially in the US.
Since the CEO assumed control in January 2017, the group has purchased a majority share stake in the California-based top of the line brand Blue Bottle Coffee and gained Texan brand Chameleon Cold Brew.
Starbucks CEO Kevin Johnson said his firm is also set for a major boost under the deal. Johnson said,
“Bringing together the world’s leading coffee retailer, the world’s largest food and beverage company, and the world’s largest and fast-growing installed base of at-home and single-serve coffee machines helps us amplify the Starbucks brand around the world while delivering long-term value creation for our shareholders,”